Awash Bank Grosses 510 Mln Birr Profit

Awash International Bank (AIB), one of the private banks in Ethiopia, made a 510 million birr gross profit in the fiscal year to 8 July 2011, outdoing its previous year unaudited gross profit by 38.3 percent.

The performance is also 14 percent higher than the bank's internal plan.

In the same year, the paid up capital of the bank grew by 40 percent from 550 million birr to 734 million birr. This was done on the decision of shareholders to raise the bank's paid up capital to one billion birr within three years.

Though AIB's liquid assets to total assets ratio declined from 34.9 percent to 31.5 percent, the bank has maintained its liquidity position. Its loan to deposit ratio is also around last year's figures of 49.5 percent. Liquid assets to deposits ratio, however, fell from 61.7 percent to 52.2 percent due to a 26.8 percent rise in deposits.

However, the excess liquidity of the bank is because of the cyclical nature of the agriculture sector whose borrowing for export and import fluctuates with the seasons, Tsehay Shiferaw, president of the bank, said.

Awash International Bank, the first bank to own headquarters in 2010/11, has adequate capital as measured by Capital Adequacy Ratio. It increased to around 38.6 percent from the previous 36.3 percent surpassing the minimum eight percent set by international standards.

Source: Fortune